Medicare DMEPOS
(Durable Medical Equipment, Prosthetics, Orthotics, and Supplies)
Competitive Bidding Program
Round 2 and
National Mail-Order Competitions
Request for Bids (RFB)
Instructions
Table of Contents
Introduction .................................................................................................................................... 1
Considerations for Submitting a Bid ........................................................................................... 2
Period of Performance ................................................................................................................. 2
Servicing the Entire CBA ............................................................................................................. 2
Non-discrimination Against Beneficiaries .................................................................................... 2
Single Payment Amount .............................................................................................................. 2
Physician Authorization Requirements ........................................................................................ 2
Accreditation and Licensure Requirements ................................................................................. 2
Eligibility Rules .............................................................................................................................. 3
1. Have an Active Provider Transaction Access Number (PTAN) ............................................... 3
2. Be Accredited ........................................................................................................................... 3
3. Be Licensed ............................................................................................................................. 3
4. Meet Financial Standards ........................................................................................................ 4
General Regulatory Requirements for Bidders........................................................................... 5
Choice of CBAs/Product Categories ............................................................................................ 5
Physical Location ......................................................................................................................... 5
Service Entire Bidding Area ......................................................................................................... 5
Commonly Owned and/or Controlled Locations .......................................................................... 5
Subcontracting ............................................................................................................................. 6
Change of Ownership (CHOW): Implications for Bidding ............................................................ 6
Bona Fide Bids ............................................................................................................................. 6
National Mail-Order Competition .................................................................................................. 8
50 Percent Rule ........................................................................................................................... 8
Bidding Process ............................................................................................................................. 9
1. Register.................................................................................................................................... 9
2. Submit Bid................................................................................................................................ 9
Changing a Bid Submission ......................................................................................................... 9
Confidentiality ............................................................................................................................. 10
Bid Application ............................................................................................................................. 11
Form A: Bid Application ............................................................................................................. 11
Form B: Bidding Form ................................................................................................................ 14
Certification Statement .............................................................................................................. 15
Required Hardcopy Documents ................................................................................................. 17
Special Documentation Requirements for Specific Bidder Types ............................................. 18
Required Financial Documentation ........................................................................................... 18
Financial Statements Checklist .................................................................................................. 19
Required Financial Documents by Business Type Chart .......................................................... 21
Other Required Documents (Non-Financial) ............................................................................. 25
Covered Document Review Process ......................................................................................... 26
Appendix A: Definitions .............................................................................................................. 27
Appendix B: Hardcopy Document Package Checklist ............................................................. 30
Appendix C: Sample Hardcopy Financial Documents ............................................................. 31
Note: Terms that are defined in Appendix A are italicized the first time they appear in this
document. If viewing the document online, click on the term to go directly to the Appendix.
Introduction
This document provides instructions for Durable Medical Equipment, Prosthetics, Orthotics, and
Supplies (DMEPOS) suppliers in order to ensure they meet the requirements to submit a bid for
the Medicare DMEPOS Competitive Bidding Program for Round 2 and for the national mail-order
competition. Read and follow these instructions carefully. Should you have any questions, please
refer to the numerous tools available on the Competitive Bidding Implementation Contractor
(CBIC) website, http://www.dmecompetitivebid.com/, or call the CBIC customer service center at
877-577-5331.
The statute requires that Medicare replace the fee schedule payment methodology for certain
DMEPOS items with a competitive bidding process. The intent is to improve the effectiveness of
the Medicare methodology for setting DMEPOS payment amounts, which will reduce beneficiary
out-of-pocket expenses and save the Medicare program money while ensuring beneficiary
access to quality items and services.
The final rule, which implements the DMEPOS Competitive Bidding Program, was published in
the Federal Register at 72 FR 17992 - April 10, 2007. The MIPPA provisions are addressed in the
Changes to the Competitive Acquisition of Certain Durable Medical Equipment, Prosthetics,
Orthotics and Supplies (DMEPOS) by Certain Provisions of the Medicare Improvements for
Patients and Providers Act of 2008 (76 FR 2873 - January 16, 2009), and the ACA provisions are
implemented in Payment Policies Under the Physician Fee Schedule and Other Revisions to Part
B for CY2011 (75 FR 73170 - November 29, 2010).
HOW THE COMPETITIVE BIDDING PROGRAM WORKS
Under the Competitive Bidding Program for Round 2 and for the national mail-order competition,
suppliers are required to submit a bid and be awarded a contract to furnish certain DMEPOS
items to Medicare beneficiaries residing in certain areas. Bids are submitted electronically
through a web-based application process and the required hardcopy documents that accompany
the bid should be submitted by common carrier (for example, U.S. Postal Service, Federal
Express, United Parcel Service) or courier. Bids are evaluated based on the supplier meeting
eligibility and financial requirements, and contracts are awarded to Medicare suppliers that offer
the best price and meet these standards.
Page 1 of 33
Introduction
LEGISLATIVE BACKGROUND
Section 1847 of the Social Security Act, as amended by the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 (MMA) and the Medicare Improvements for
Patients and Providers Act of 2008 (MIPPA), requires the Secretary to establish and implement a
Medicare DMEPOS Competitive Bidding Program. Section 1847(a)(1)(D), as amended by the
Affordable Care Act (ACA), provided for an additional 21 metropolitan statistical areas (MSAs) to
the original 70 MSAs that were selected as of June 1, 2008, to be included in Round 2 of the
program. It also allows for the subdivision of MSAs with populations of at least 8 million into
multiple competitive bidding areas (CBAs). As a result, 100 CBAs are included in Round 2.
Section 1847 of the Social Security Act also authorizes competition for national mail-order items
and services.
Considerations for Submitting a Bid
(Not an inclusive list – see the Contract Supplier Obligations fact sheet on the CBIC website for
additional information.)
Period of Performance
Suppliers that are awarded a contract must agree to furnish the competitively bid items for
the full duration of the contract period throughout the entire CBA. The length of the contract
period may not exceed three years.
Servicing the Entire CBA
The national mail-order competition CBA includes all parts of the United States, including the
50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, and American
Samoa.
The only exception to this rule applies to a skilled nursing facility (SNF) or nursing facility (NF)
that is bidding for enteral nutrients, equipment, and supplies and is awarded a contract as a
specialty supplier that furnishes competitively bid items only to its own residents to whom it
would otherwise furnish Part B services.
Non-discrimination Against Beneficiaries
The items furnished by a contract supplier as part of the Competitive Bidding Program must
be the same items that the contract supplier makes available to its other customers. This
means that suppliers should furnish Medicare and non-Medicare customers with the same
selection of DMEPOS brands and models.
Single Payment Amount
Under the DMEPOS Competitive Bidding Program, the existing DMEPOS fee schedule
payment amounts will be replaced with the single payment amounts for selected items. The
single payment amount for an item furnished under a Competitive Bidding Program is equal
to the median amount of bids submitted and accepted for that item (see 42 CFR §414.416).
The single payment amount remains in effect for the entire contract period and is not
adjusted by any update factor (see 42 CFR §414.408(b)).
Physician Authorization Requirements
Under the DMEPOS Competitive Bidding Program, physicians or treating practitioners may
prescribe a specific brand or mode of delivery to avoid an adverse medical outcome. When a
physician or treating practitioner prescribes a particular brand or mode of delivery of an item,
the supplier must: 1) furnish the particular brand of an item or mode of delivery as prescribed;
2) consult with the physician or treating practitioner to find an appropriate alternative brand or
mode of delivery; or 3) assist the beneficiary in locating a contract supplier that can furnish
the particular brand or mode of delivery (see 42 CFR 414.420).
Accreditation and Licensure Requirements
Under the DMEPOS Competitive Bidding Program, contract suppliers must be accredited by
a Medicare-approved accreditation organization and comply with all applicable state and local
licensing requirements. See the licensure section below under Eligibility Rules for more
information and bidding instructions.
Page 2 of 33
Considerations for Submitting a Bid
A contract supplier must furnish competitively bid items to any beneficiary who maintains a
permanent residence in or who visits a CBA and who requests those items from the contract
supplier. Members of a network may share the responsibility to furnish competitively bid items
in the product category throughout the entire geographic area of a CBA.
Eligibility Rules
Bidding suppliers must meet the following basic eligibility criteria to be considered for a contract.
Each location listed on the bid must:
1. Have an Active Provider Transaction Access Number (PTAN)
Bidding suppliers must be Medicare-enrolled DMEPOS suppliers in good standing with
an active Provider Transaction Access Number (PTAN) for each location listed on
the bid. Suppliers should ensure that their enrollment file is up-to-date in the Provider
Enrollment, Chain and Ownership System (PECOS) and with the National Supplier
Clearinghouse (NSC) as information in the enrollment file will be verified during the
registration and bidding process.
2. Be Accredited
Suppliers must be accredited by a Centers for Medicare & Medicaid Services (CMS)
approved accreditation organization for the product category(s) for which they intend to
bid. Contracts are awarded only to suppliers that are accredited for all items in the
product category.
3. Be Licensed
Revised 2/2/12
Bidding suppliers must ensure that copies of all applicable state licenses are RECEIVED
by the NSC on or before May 1, 2012. Bids will be disqualified if a bidder does not meet
all state licensure requirements for the applicable product categories and for every state
in a CBA. Every supplier location is responsible for having all applicable license(s) for
each state in which it provides services. For a multi-state CBA, the bidder must
collectively have all applicable license(s) for every state in the CBA. Each location is not
required to have licenses for every state in the CBA as long as each state has a bidding
location licensed for the product category.
Example: A single location supplier bidding in the Minneapolis-St. Paul-Bloomington
(Minnesota and Wisconsin) CBA that has only one (1) location that is in Minnesota
must have that location appropriately licensed in both Minnesota and Wisconsin to
provide the competitively bid item.
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Eligibility Rules
CMS Approved Accreditation Organizations:
• Accreditation Commission for Health Care, Inc.
• American Board for Certification in Orthotics & Prosthetics, Inc.
• Board of Certification/Accreditation International
• Commission on Accreditation of Rehabilitation Facilities
• Community Health Accreditation Program
• HealthCare Quality Association on Accreditation
• National Association of Boards of Pharmacy
• The Compliance Team, Inc.
• The Joint Commission
• The National Board of Accreditation for Orthotic Suppliers
A supplier with multiple locations in a multiple-state CBA must have a licensed location
for each state in the CBA.
Example: For the Philadelphia-Camden-Wilmington (Pennsylvania, New Jersey,
Delaware, and Maryland) CBA, the supplier must have a licensed location for PA,
NJ, DE and MD. Each location does not have to be licensed for all states; however,
every location that provides items in a state must be licensed for that state.
This requirement also applies to suppliers bidding in the national mail-order competition.
The national mail-order competition includes all parts of the United States, including the
50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, and
American Samoa. The supplier must have the applicable licenses required for every part
of the United States included in the national mail-order CBA. Please note that not all
states require a license for mail-order diabetic supplies. However, every supplier location
must be licensed as applicable for each state in which it provides services. A supplier
with only one location in a multiple-state CBA must have a license for each state in the
CBA in order to be awarded a competitive bidding contract.
For additional information, review the licensure directory on the NSC website and the
Licensure for Bidding Suppliers fact sheet on the CBIC website.
All bidders must meet the financial standards for participation in the Competitive Bidding
Program. Bidding suppliers are required to submit specified financial documents for the
most recent year in which a tax return has been submitted. Financial documents should
represent calendar or fiscal year 2010 or 2011. Documents should not be for an
accounting year for months prior to 2009. CMS determines a supplier’s financial viability
based on financial ratios calculated from the bidder’s submitted financial information. The
financial ratios can be found on the CBIC website. All bidders must meet CMS’
established financial thresholds to be considered for a contract.
Page 4 of 33
Eligibility Rules
4. Meet Financial Standards
General Regulatory Requirements for Bidders
Bidding suppliers must also comply with the following regulations to be awarded a contract:
Choice of CBAs/Product Categories
Bidders do not have to submit a bid for all Round 2 product categories and CBAs but may
choose to bid for certain product categories in certain CBAs. Bidders may also choose to bid
only in the national mail-order competition or may choose to bid in both competitions.
Physical Location
Contracts are awarded only to locations listed on Form A in the online DMEPOS Bidding
System (DBidS). It is important that suppliers identify the PTANs of all locations that will
provide competitively bid items in a CBA; only those locations identified on the bid will be
included in the contract and eligible for Medicare payment for competitively bid items at the
time the program begins.
Service Entire Bidding Area
Contract suppliers are required to furnish competitively bid items to beneficiaries throughout
the entire CBA or, in the case of the national mail-order competition, in all parts of the United
States, including the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands,
Guam, and American Samoa.
Suppliers should not submit a bid unless they currently have the ability to furnish items and
services throughout the entire bidding area.
•
For Round 2 product categories, suppliers must agree to furnish competitively bid
items to beneficiaries throughout the entire CBA.
•
For mail-order diabetic testing supplies, suppliers must agree to furnish items to
beneficiaries in all parts of the United States, including the 50 states, the District of
Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, and American Samoa.
If a supplier intends to use the services of a subcontractor, the supplier must ensure the
subcontractor is accredited as applicable and complies with the standards in 42 CFR
§424.57(c). See the Subcontracting section of this document for more information about
subcontracting.
Commonly Owned and/or Controlled Locations
Suppliers may not bid against themselves for the same product category in the same CBA.
Therefore, commonly owned or commonly controlled suppliers must submit one bid that
includes all commonly owned and/or controlled locations that would furnish competitively bid
items in the same product category in the designated CBA or that would furnish mail-order
diabetic testing supplies nationally. Separate bids submitted for the same product category in
the same CBA by supplier organizations that are commonly owned or controlled will be
disqualified; this includes suppliers bidding in the national mail-order competition.
Commonly owned and/or controlled locations outside of the CBA that would routinely furnish
items in the product category to beneficiaries in the CBA must also be identified on Form A
under the location-specific section. Only locations identified in the bid are included in the
Page 5 of 33
General Regulatory Requirements
Contract suppliers must be ready to provide services in the CBA or nationwide, if bidding in
the national mail-order competition, on day one of the contract period. Suppliers of mail-order
diabetic testing supplies must be prepared to provide such supplies to Medicare beneficiaries
in all parts of the United States, including the 50 states, the District of Columbia, Puerto Rico,
the U.S. Virgin Islands, Guam, and American Samoa. To ensure that only qualified suppliers
become contract suppliers, a supplier must have at least one physical location that meets all
requirements to serve a CBA in order to bid in that CBA. Suppliers with physical locations
outside of CBAs may bid on those CBAs only if they meet all requirements (e.g., state
Revised 2/2/12 licensure, accreditation) at the time of bidding. Bidding suppliers must ensure that copies of
all applicable state licenses are RECEIVED by the NSC on or before May 1, 2012.
contract and eligible for Medicare payment at the time the program begins. The common
ownership rules also apply to the national mail-order competition; all locations that will
provide diabetic testing supplies in the national mail-order competition must be identified in
the bid.
Common ownership and common control requirements can be found in 42 CFR §414.414(e).
Subcontracting
For additional information on the functions that subcontractors can and cannot do, see the
CBIC website for the Subcontracting fact sheet.
Subcontractor Disclosure Requirements
If awarded a competitive bidding contract, contract suppliers must meet the following
subcontractor disclosure requirements:
• Notify CMS of any subcontracting relationships established for purposes of furnishing
items and services under the program.
• Disclose whether the subcontractor meets the accreditation requirements necessary
to furnish these services.
Contract suppliers are responsible for the items and services they provide directly or
through the use of a subcontractor. This includes maintaining proper documentation
and ensuring appropriate delivery, setup, and/or instruction. See the NSC website at
http://www.palmettogba.com/nsc for a more detailed explanation of subcontracting
and the supplier standards.
Change of Ownership (CHOW): Implications for Bidding
If a CHOW occurs before the bid window closes, suppliers must update the information
related to the CHOW on the Request for Bids (RFB) forms in DBidS. The supplier must also
resubmit all accompanying hardcopy documents reflecting the CHOW by the close of the bid
window. The supplier must also notify the NSC of the CHOW in accordance with the supplier
standards.
If a CHOW occurs during bid evaluation, bids will be evaluated based on the information
provided as of the close of the bid window. Documentation and information submitted on the
new owner will not be used during this time period. If a supplier is offered a contract and
executes a CHOW transaction after the bid window closes, it must abide by the CHOW
requirements provided in 42 CFR §414.422(d).
Contracts under this program may not be sold and may only be transferred when
permitted by CMS consistent with the requirements in 42 CFR §414.422. Additionally, a
CHOW does not guarantee that a purchaser will be allowed to assume a competitive
bidding contract. The purchaser must meet all of the competitive bidding requirements
before CMS approves a novation agreement that transfers all contract obligations to
the purchaser. Fact sheets and frequently asked questions regarding CHOWs can be
found on the CBIC website.
Bona Fide Bids
All bid amounts must be bona fide (rational and feasible for the bidder to furnish at the bid
price). Suppliers should not submit a bid for an item at a loss in order to improve their
Page 6 of 33
General Regulatory Requirements
Suppliers participating in the Competitive Bidding Program may use subcontractors to assist
them in carrying out the terms of the competitive bidding contract. If a supplier intends to use
the services of a subcontractor, the supplier must ensure the subcontractor is accredited, if
applicable, and must comply with the supplier standards in 42 CFR §424.57. The supplier
standards describe the services for which a Medicare-enrolled DMEPOS supplier may
subcontract to another entity. These functions include the:
• purchase of inventory,
• maintenance and repair of rented equipment,
• delivery of a Medicare-covered item only, and
• setup and/or instruction on use of a Medicare-covered item
chances of winning a contract. Suppliers should include all costs related to furnishing an item
to the beneficiary in the bid price.
CMS will evaluate bids to ensure that they are bona fide and may request that a supplier
submit additional information, such as manufacturers’ invoices, to validate the bid amount.
The supplier will also be required to provide a valid and reasonable rationale to support its bid
amount.
If a supplier submits a non-bona fide bid for any competitively bid item in a product
category, the entire bid for that product category in that CBA will be disqualified. For
the national mail-order competition, the entire bid will be disqualified.
Page 7 of 33
General Regulatory Requirements
A bid preparation worksheet is available on the CBIC website to assist bidders in determining
their bid amount and if their bid is bona fide. Suppliers should NOT mail this worksheet to the
CBIC. However, if the supplier is asked to validate its bid during the bona fide bid process,
the worksheet can be submitted along with a rationale to support the validity of the bid.
National Mail-Order Competition
50 Percent Rule
In accordance with 42 CFR §414.411, bidders for mail-order diabetic supplies must
demonstrate that their bids cover at least 50 percent of all types of diabetic testing strips on
the market. This rule will help ensure that Medicare beneficiaries have access to a wide
variety of mail-order diabetic supplies.
Bidders must complete the National Mail-Order 50 Percent Compliance form on the CBIC
website to indicate the brands of diabetic testing strips they intend to furnish if awarded a
contract. The form MUST be received by the CBIC along with the other required hardcopy
documents by the close of the bid window. The bidder number MUST be indicated on the
form. Only suppliers that meet the 50 percent rule and mail their form to the CBIC will be
eligible for contract award.
For additional information, please refer to the National Mail-Order Competition for Diabetic
Supplies fact sheet on the CBIC website.
Page 8 of 33
National Mail-Order Competition
A bid preparation worksheet is available on the CBIC website to assist bidders in determining
if their bid for diabetic testing supplies is bona fide. Suppliers should NOT mail this worksheet
to the CBIC unless they are later asked to provide documentation to support their bid.
Bidding Process
The bidding process includes three steps:
1. Register for user ID and password
2. Submit bid in the bidding system
3. Mail required hardcopy documents
1. Register
Suppliers intending to submit a bid must first obtain a user ID and password to access
DBidS by registering in the Individuals Authorized Access to the CMS Computer Services
(IACS) application. Bidding suppliers will register in IACS on the CBIC website. Only an
individual identified as an authorized official (AO) on the CMS-855S enrollment form can
register the company and approve the registration of the end users and backup
authorized officials (BAOs). A BAO is someone who is also identified as an AO on the
855S and can serve as a backup to the AO.
Registration Schedule
December 5, 2011, at 9:00:00 a.m.
Registration Closes
February 9, 2012, at 9:00:00 p.m.
Please see the IACS Reference Guide on the CBIC website for step-by-step instructions
on how to register.
2. Submit Bid
All bidders must submit bids electronically via DBidS, which is located on the CBIC
website. Please carefully review the DBidS Reference Guide for instructions and
assistance.
Bidding Schedule
DBidS Opens
January 30, 2012, at 9:00:00 a.m.
DBidS Closes
March 30, 2012, at 8:59:59 p.m.
A supplier’s bid must be completed, approved, and certified by the close of the bid window
in order to be considered. Please note that changes to a bid after it has been approved or
certified may result in a need to reapprove or recertify.
Bidders do not have to submit a bid for all Round 2 product categories and CBAs but may
choose to bid for certain product categories in certain CBAs.
Changing a Bid Submission
Bidders have 60 days to submit their bids in DBidS. Bidders may amend their bids as many
times as necessary prior to the close of the 60-day bid window.
Hardcopy documents may be amended prior to the close of the bid window as long as the
amended documents are identified as “amended” and received by the CBIC on or before
March 30, 2012.
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Bidding Process
Registration Opens
Once the bid window has closed, no further changes can be made to the electronic bid, and
CMS will only accept hardcopy documents that it has requested through the covered
document review process. See Covered Document Review Process section of this
document for more information.
Confidentiality
CMS will protect the confidentiality of bidders’ proprietary financial and bidding information to
the extent provided by law and will follow the procedure stated in 45 CFR §5.65. CMS will not
share information about any bidder’s proposal with other bidders.
However, an independent evaluator may be granted access to bidders’ or networks’ bidding
information as permitted by law. Any reports that are created to evaluate the program will be
reported in an anonymous or aggregate format. Bidding information may be reviewed as
required by law by the U.S. Government Accountability Office (GAO) and the Department of
Health and Human Services (DHHS) Office of Inspector General (OIG), and by the
Department of Justice (DOJ) as permitted by law. CMS will request that any reports created
to evaluate the program by the GAO and DHHS/OIG will report bidding information in an
anonymous or aggregate format.
Contractor staff with access to bidding information is required to sign a statement agreeing to
maintain the confidentiality of each bidder’s information.
Bidding Process
Page 10 of 33
Bid Application
The bid application consists of two RFB forms approved by the Office of Management and
Budget (OMB):
Form 10169A: Bid Application
Form 10169B: Bidding Form.
Bidders are required to complete Form A and Form B online using the DMEPOS Bidding
System (DBidS), which can be accessed through the CBIC website. If you are bidding in
both the Round 2 and national mail-order competition, you have to complete only one
Form A that includes all of the information on your company. You would then select
national mail-order for the CBA and mail-order diabetic supplies among your product
categories.
•
Requests information about (1) the bidder’s organization and (2) the organization’s
locations that are included in the bid. Suppliers must identify their organizations as one
of a specific business organization type (supplier with single location, supplier with
multiple locations, or network). For definitions and additional information, see the
Bidding Types Identified on Form A section of this document.
•
Requires the bidder to provide identifying information, such as the legal business
name, doing-business-as name, mailing address, and physical address for both the
business organization and for each location identified by the PTAN. Bidders must also
select the CBA(s)/product category(s) for which they are bidding.
Only the PTANs entered on the bid will be included in a contract award and will be the only
PTANs qualified to receive payment from Medicare for competitively bid items.
Suppliers are only required to complete ONE Form A for each business organization type
(supplier with single location, supplier with multiple locations, or network). Suppliers
submit ONE Form A, regardless of the number of CBAs and product categories being bid and
regardless of whether the supplier is bidding in Round 2 and/or in the national mail-order
competition for diabetic testing supplies. There are only two exceptions to this requirement
which are described below.
Exception to the Requirement for Submitting Only One Form A:
1. If a supplier is bidding independently in one product category/CBA or the
national mail-order competition and is also bidding as part of a network in
another CBA, the supplier must register in IACS and then submit separate
Form As. The supplier will receive distinct bidder numbers and must
complete two Form As: 1) as an independent bidder, and 2) as a network
bidder if the bidder is the primary network member. NOTE: Suppliers may
not bid for the same product category in the same CBA as both a single
entity and as part of a network.
2. If a supplier has more than one location within the same CBA and one or
more of the locations furnishes a different product line that does not
compete against the other location(s), the supplier will have distinct bidder
numbers and must complete separate Form As representing each bidder
number.
Please refer to the IACS User Guide for more information on this exception.
Page 11 of 33
Bid Application: Form A and Form B
Form A: Bid Application
The business organization section of Form A must be complete before a bidder number is
assigned. The bidder number is very important and MUST be included on EACH PAGE of
the required hardcopy documents.
The authorized official or backup authorized official must approve Form A before it is
considered complete and before the bidder can progress to Form B. Please note that
changes made to the bid after it has been approved or certified may result in a need to
reapprove or recertify the bid. However, no changes can be made after the bid window has
closed.
Bidding Types Identified on Form A
Single Location
A single location supplier is a bidding entity with only one location that has one or more
owners and is represented by a single PTAN.
Subsidiary of a Parent Company/Holding Company
Parent-subsidiaries are separate entities where one entity has control of the other. In
general, a parent entity is a company that owns controlling interests in one or more
companies. A subsidiary is a company that is controlled by a parent company. These
companies do not have to operate in the same locations or even in the same
business.
Commonly Owned or Commonly Controlled
Commonly owned suppliers are those where one or more of them has an ownership
interest totaling at least 5 percent in the other(s). The term “ownership interest” is
defined as “the possession of equity in the capital, stock, or profits of another
supplier,” as defined in 42 CFR 414.412(e). Commonly controlled suppliers are those
where one or more of the supplier’s owners is also an officer, director, or partner in
another supplier.
Commonly owned or commonly controlled suppliers must submit one bid that
includes all commonly owned or controlled locations that would furnish the same
product category within the designated CBA. Separate bids submitted for the same
product category in the same CBA by commonly owned or controlled supplier
organizations will be disqualified. Likewise, commonly owned or controlled suppliers
that submit separate bids for mail-order diabetic testing supplies will be disqualified.
National Chain
A DMEPOS chain organization is defined by the National Supplier Clearinghouse as
“25 or more” DMEPOS supplier locations. Chain organizations must identify all
locations inside and outside of the CBA that would routinely furnish the items in the
product category to beneficiaries within the CBA. Only those locations (PTANs)
identified on the bid will be included on the contract and only those locations are
eligible for payment if the bidder is awarded a contract. However, approved locations
can be added after contract award.
Franchise
A franchise is a company that purchases a license from an owner of a trademark or
trade name permitting another to sell a product or service under the name or mark. If
a franchise only shares the company name or corporate marketing services from the
franchisor company, these companies are not considered commonly owned for
bidding purposes. Each franchise must submit a separate bid to include its own
financial documents.
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Bid Application: Form A and Form B
Multiple Location
Multiple-location suppliers have two or more locations with one or more owners (may be
commonly owned or commonly controlled) and each location is identified by a unique
PTAN. Multiple-location suppliers may or may not share a common taxpayer identification
number. Multiple-location suppliers may be one of the following:
Network
Small suppliers have the option to join a network if they are unable to independently
furnish all of the items in the product category to Medicare beneficiaries throughout the
entire geographic area of a CBA. A small supplier is defined in 42 CFR 414.402 as one
that generates gross revenue of $3.5 million or less in annual receipts, including
Medicare and non-Medicare revenue.
Please note that networks are excluded from bidding in the national mail-order
competition because all suppliers in the national mail-order competition must be able to
independently furnish all of the items in the product category throughout the entire
geographic area. Therefore, networks are excluded from bidding in this competition.
Network Agreement: Each network must form a single legal entity to submit a bid. A
network must identify a primary network member that will be responsible for
submitting a bid on behalf of the network. The network must provide a name for its
network in DBidS and must identify all of its members and their locations.
All agreements, including contracts, required to create the entity must be in place and
signed before the network submits a bid. These agreements must be submitted along
with other required hardcopy documents.
Each network member must provide all items in the product category for which he or she
is awarded a contract.
Networks must have at least two (2), but not more than twenty (20), members.
At the time the network submits its bid for Round 2, its current market share for each
product category in the CBA may not exceed 20 percent of the total Medicare demand for
that product category in the CBA. If the network has provided greater than 20 percent of
Medicare volume for the entire product category in the CBA during the last calendar year,
that network bid will be disqualified. Please see the bid preparation worksheet for
assistance in determining market share.
Revised 2/2/12
Each member of the network, along with its locations, must meet all eligibility,
accreditation, licensure, and financial requirements at the time of bidding to participate in
the Competitive Bidding Program. Each member must ensure that copies of all applicable
state licenses are RECEIVED by the NSC on or before May 1, 2012. If one member of
the network does not meet one or more of the competitive bidding requirements, then the
entire network’s bid is disqualified.
A small supplier may join one or more networks but cannot submit an individual bid to
furnish the same product category in the same CBA as a network in which it is a member.
A small supplier may not be a member of more than one network if those networks
submit bids to furnish the same product category in the same CBA.
Common Ownership Among Networks
Commonly owned or commonly controlled suppliers that are members of a network
must submit one bid that includes all locations that will provide the competitively bid
items in the CBA. All locations must be included on Form A to be awarded a contract
and receive Medicare payment for competitively bid items in the CBA.
Separate bids for the same product category in the same CBA that are submitted by
suppliers independently or as members of the network that are commonly owned or
commonly controlled will be disqualified. See the Common Ownership or Common
Control section of this document for more information.
Page 13 of 33
Bid Application: Form A and Form B
Member Certification: Each network member must provide a separate statement
certifying that it joined the network because it was unable to independently furnish all
of the items in the product category throughout the entire geographic area for which
the network is submitting a bid. The primary network supplier should print a
certification statement in DBidS for each member to sign and include all signed
certifications with the package of required hardcopy documents.
In addition, any commonly owned or commonly controlled locations outside of the CBA
that would routinely furnish items in a product category to beneficiaries within the CBA
must also be included on Form A. These locations must be listed in the location-specific
information section to be awarded a contract and receive Medicare payment for
competitively bid items in the CBA.
Important: Networks are excluded from bidding in the national mailorder competition.
All suppliers in the national mail-order competition must be able to independently
furnish all of the items in the product category throughout the entire geographic
area. Therefore, networks are excluded from bidding in this competition.
A SNF or NF may choose to become a specialty supplier. A specialty supplier is a SNF or
NF that elects to furnish competitively bid items only to its own residents. To become a
specialty supplier, the SNF or NF must select the specialty supplier option on Form A and
be awarded a contract as a specialty supplier. SNFs or NFs that do not become contract
suppliers (either a specialty supplier or regular contract supplier) must use contract
suppliers to furnish competitively bid items to their residents in their CBA.
Form B: Bidding Form
•
Includes the bidding forms for each product category/CBA and for the national mailorder competition. A separate Form B is required for each competition.
•
Requests historic information about the supplier’s experience in the product category
and/or CBA. The supplier must provide the number of units it has furnished to all
customers, Medicare and non-Medicare, for the top 80 percent of the Healthcare
Common Procedure Coding System (HCPCS) codes in the product category during the
past calendar year in the CBA.
•
Requires suppliers to identify the manufacturer and model of the products they plan to
make available to beneficiaries in the CBA. This information will be used to populate
the Medicare Supplier Directory on the Medicare website, http://www.medicare.gov/.
The supplier directory will list the manufacturer information for the top items provided
by contract suppliers to allow beneficiaries to make informed choices about the
available products. The Medicare Supplier Directory is used by Medicare beneficiaries,
caregivers, referral providers, and 1-800-MEDICARE customer service representatives
when assisting beneficiaries. Therefore, it is important that bidders provide accurate
information on Form B.
•
For the national mail-order competition: Bidders are required to complete a separate
form on the CBIC website that documents that the supplier is in compliance with the 50
percent rule. Please see the National Mail-Order Competition section of this
document for more information.
Page 14 of 33
Bid Application: Form A and Form B
Specialty Supplier
Skilled nursing facilities (SNFs) and nursing facilities (NFs) are not exempt from the
Competitive Bidding Program. A SNF or NF that also serves as a DMEPOS supplier and
wants to become a contract supplier must submit a bid and compete in the Competitive
Bidding Program. Only those facilities that are enrolled as DMEPOS suppliers with the
NSC and meet the applicable competitive bidding requirements may submit a bid to
become a contract supplier.
Bidding Form:
Total Estimated Capacity – Requires suppliers to provide their expected capacity.
The total estimated capacity indicates the number of units per HCPCS code you
estimate you can furnish throughout the entire CBA for one (1) year. The bid
preparation worksheet on the CBIC website contains the unit by product category
definitions. To determine your expected capacity, calculate the number of units you
currently furnish in the area on a yearly basis and add units you would be capable
of providing annually as of the start of the contract period. It is anticipated that
suppliers can maintain this level or greater throughout the contract period.
Bid Price – The amount for which you can furnish the item, including all costs
associated with furnishing the item. The bid price must be rational and feasible and
must indicate the cost of furnishing a new item or the rental of a new item at the bid
price submitted.
After a supplier has completed Form B, the authorized official or backup authorized official
must certify Form B. Bids that are not certified will not be considered for bid evaluation.
Bids will be evaluated based on the information provided in DBidS and submitted in the
package of hardcopy documents. Once the bid window closes, all bids are considered final
and cannot be amended by the bidder. Bidders can always check the DBidS status page for
45 days after the bid window closes to confirm that their online bid is complete, approved,
and certified by the authorized official or backup authorized official, and whether their
hardcopy documents have been received by the CBIC. The DBidS status page will remain
available for 45 days after the bid window closes for you to check your status. This allows you
to confirm that your online bid is complete, approved, and certified by the authorized official.
You can also confirm whether your hardcopy documents were received by the CBIC and by
the covered document review date.
An indication that the document package has been received does not mean
that the documents in the package are accurate, complete, or otherwise meets
CMS’ criteria. It is each bidder’s responsibility to submit a complete package
that includes all required hardcopy documents.
Please refer to the Required Hardcopy Documents section for additional information and
instructions.
CMS reserves the right to seek clarification or corrections from a bidder if necessary. CMS
will seek such clarifications or corrections uniformly.
For step-by-step instructions on entering or modifying information in DBidS, please refer to
the DBidS Reference Guide.
Certification Statement
After completing Form A and Form B, the authorized official must certify the bid in DBidS.
In order for a bid submission to be complete, an authorized official or backup authorized
official must approve Form A and certify that the information provided on Form A, Form B,
and in the package of required hardcopy documents is true, correct, and complete. Only an
authorized official or backup authorized official may approve Form A and certify the bid by
completing the approval and certification statement in DBidS. The certification statement
serves as the bidder’s electronic signature.
Please note that changes made to Form A or Form B after approval or certification may
require the authorized official or backup authorized official to reapprove Form A or recertify
Form B. You can verify the status of your bid by revisiting the DBidS home page.
Page 15 of 33
Bid Application: Form A and Form B
Item description, bid type, item weight and fee schedule amount will be provided on
the bid form.
NOTE FOR NETWORKS: Networks are required to submit a hardcopy certification statement
for each member along with their package of hardcopy documents. The primary network
member should print copies of the online certification statement and provide these copies to
each network member to sign. Each network member should individually sign its certification
statement and provide it, along with the other required hardcopy documents, to the primary
network member. This certification statement is a required hardcopy document for each
network member and certifies that the network member joined the network because it is a
small supplier and unable to independently furnish the items in the product category to
beneficiaries throughout the entire geographic area of the CBA.
The primary network member must also submit a network agreement attesting to the creation
of a single legal entity for purposes of participating in the Competitive Bidding Program.
Bid Application: Form A and Form B
Page 16 of 33
Required Hardcopy Documents
In addition to completing Form A and Form B in DBidS, bidders must submit the required
hardcopy documents in one complete package to the CBIC. Only one package of hardcopy
documents is required for each bidder number, regardless of how many Form B bids are
submitted. Each package must include:
ALL BIDDERS in Round 2 and/or the national mail-order competition:
• Financial documents
 Income Statement
 Balance Sheet
 Statement of Cash Flows
• Tax return extract
• Credit report and credit score
(See Required Financial Documents By Business Type chart.)
NATIONAL MAIL-ORDER BIDDERS
• 50 percent compliance form
BIDDERS THAT INTEND TO SUBCONTRACT
• Letter of intent to enter into a subcontracting agreement
BIDDERS THAT HAVE BEEN SANCTIONED WITHIN LAST FIVE YEARS
• Settlement agreement or corporate integrity agreement, if applicable
It is VERY IMPORTANT that EACH PAGE include the supplier’s bidder number to ensure
that the documents are associated with the correct bid. The bidder number is issued in DBidS
after completion of the business organization section in Form A.
All hardcopy documents must be RECEIVED by the CBIC on or before March 30, 2012.
Documents not received by that date will not be accepted. We highly recommend that the
package be sent by a method that can be tracked and requires a signature upon receipt. The
only documents that will be accepted and considered for evaluation after March 30, 2012, are
missing documents identified in a written notice from the CBIC during the covered document
review process. Hardcopy document packages should be sent to:
Palmetto GBA
Competitive Bidding Implementation Contractor
2743 Perimeter Pkwy, Suite 200-400
Augusta, GA 30909-6499
!
!
!
Submit all documents in loose page format – no binders, folders, staples, or paper clips
The bidder number MUST be included on EACH PAGE of the required hardcopy documents.
The bidder number is assigned once the Business Organization page within Form A in the
DMEPOS Bidding System (DBidS) is completed. Once assigned, the bidder number can be
found on each page in DBidS.
Only ONE package of documents is required per bidder number, regardless of the number of
Form Bs.
Use the Hardcopy Document Package Checklist (Appendix B) and Required Financial
Documentation by Business Type Chart when preparing your submission.
Page 17 of 33
Required Hardcopy Documents
NETWORK BIDDERS:
• Legal agreement and
• Network certification pages signed by each network member
Special Documentation Requirements for Specific Bidder Types
Commonly Owned or Commonly Controlled
Compile all required documentation from each supplier and submit one package.
Suppliers cannot bid against themselves for the same product category in the same CBA.
Therefore, commonly owned or commonly controlled suppliers must submit one bid that
includes all locations in the CBA that will furnish competitively bid items.
Parent-Subsidiaries
If the bidding supplier is a subsidiary of a parent organization and the subsidiary files its
own tax return, the subsidiary must submit its own financial documentation. If the
subsidiary does not file its own tax return, the subsidiary must submit the parent’s
financial documentation.
For example, a supplier in business for six months would submit actual financial
statements for the six months actually in business and pro forma or prospective financial
statements for the remaining six months. Actual and pro forma financial statements
should not be aggregated or combined for the same period. Each statement must be
separately prepared for the months in which it applies. The combination of actual and pro
forma statements must cover a 12-month period.
Networks
Compile all required documentation from each supplier included in the network and
submit one package. If the supplier is submitting an individual bid and is also submitting a
bid as part of a network, the supplier must submit separate financial packages for each
bidder number to support both the individual and the network bids. Suppliers cannot bid
against themselves for the same product category in the same CBA. Therefore, a
supplier cannot submit both an individual bid and a network bid for the same product
category and CBA.
Required Financial Documentation
All bidding suppliers are required to submit certain financial documents for the most current
year (fiscal or calendar) in which a tax return has been submitted. The financial statements
and the tax extract must be for the same 12-month accounting period. Therefore,
financial documents should represent calendar or fiscal year 2010 or 2011. Documents
should not be for an accounting year that includes months prior to 2009.
For example, if the financial statements are for the 2010 calendar year, the tax return extract
must be for the 2010 calendar year. For specific requirements based on your business type
(corporation, sole proprietor, partnership, non-profit, municipality- or state-owned
organization), please refer to the Required Financial Documents by Business Type chart.
Page 18 of 33
Required Hardcopy Documents
New Suppliers
If a supplier has been in business for less than one (1) year from the date on which the
bid is submitted, the supplier must submit appropriate combinations of actual and pro
forma data representing the months to which they apply to equal a one-year period.
Financial Statements Checklist
(Calendar or Fiscal Year)
All bidding types must submit:
1. Three financial statements, which are the income statement, balance sheet,
and statement of cash flows;
2. Tax return extract; and
3. Credit report with numerical score.
All documents should be prepared in accordance with Generally Accepted Accounting
Principles (GAAP).
1) Financial Statements
The Balance Sheet must include:
□ Current assets
□ Total assets
□ Current liabilities
□ Total liabilities
□ Stockholders’ equity or owner’s capital
The Statement of Cash Flows must include:
□ Cash flow resulting from operating activities
□ Cash flow resulting from financing activities
□ Cash flow resulting from investing activities
□ Beginning and ending cash balances
!
!
See examples of financial statements in Appendix C.
Only submit the required documents. Do NOT include other documents such
as bank references, personal financial statements of corporate stockholders,
advertising materials, or bank statements. Only required documents will be
evaluated; supplemental documents will be disregarded.
We strongly recommend that the financial statements be compiled by an independent
accounting firm.
The financial statements must be submitted on either a fiscal or calendar year and must be
for a 12-month accounting period; individual financial statements for each month are not
acceptable.
Financial statements must be prepared on either the accrual or cash basis of accounting.
Financial statements must include all parts identified in the Required Financial Documents by
Business Type chart. If not already included, it is recommended that bidders modify their
balance sheet to include inventory, accounts receivable, and accounts payable.
Each financial statement must correspond with related financial statements. For example,
ending cash on the statement of cash flows should equal ending cash on the balance sheet.
Data within the financial statements must accurately total.
Page 19 of 33
Required Hardcopy Documents
The Income Statement must include:
□ Revenues
□ Adjustments to revenues (if applicable)
□ Cost of goods sold
□ Expenses by category such as salary, utilities, rent, etc.
□ Net income/loss
The statement of cash flows should be sectioned into cash flows resulting from operating
activities, financing activities, and investing activities. If you do not have activities in one or
more sections, you must indicate this by placing a zero value under the appropriate
titled section.
Forms submitted by bidders to federal agencies for other purposes, such as Small Business
Administration (SBA) forms, are not acceptable substitutes for financial statements.
2) Tax return extract
The tax return and the three financial statements outlined above must be for the same 12month accounting period. These documents should be for the most current year in which a
tax return has been submitted. Therefore, financial documents should represent calendar or
fiscal year 2010 or 2011. No part of an accounting year should include months prior to 2009.
•
•
DO NOT submit the entire tax return, only the required pages.
The required pages of the tax return and the financial statements must cover
the same 12-month accounting period.
For example, if the tax return extract is for the 2010 calendar year, then the
financial statements must be for the same calendar year – 2010.
The tax return extract requirement does not apply to municipality- and stateowned entities which do not submit tax returns. These entities are not
required to provide other documents to substitute for this requirement.
3) Credit report with numerical credit score
Suppliers must submit a copy of a credit report with numerical score that was prepared
within 90 days prior to the opening of the bid window. All credit reports/scores must be
prepared on or after November 1, 2011, and before March 31, 2012.
!
Credit reports must be prepared by one of the following: Dun & Bradstreet,
Experian, Equifax, TransUnion, or Standard & Poor’s.
!
Credit reports from other companies will not be accepted.
Credit reports must include a numerical score. The only exception is an alpha score from
Standard & Poor’s. Any other forms of gauging credit other than a numerical score (such as
arrows indicating relative value of credit or the number of days beyond term) are not
acceptable.
If no credit report is available for the business, a personal credit report and numeric score for
the principal business owner is acceptable as long as it is prepared by an acceptable bureau
within 90 days prior to the opening of the bid window. However, a personal credit report and
score is not acceptable from bidders filing a regular ‘C’ corporation tax return (Form 1120),
except in cases of newly formed corporations.
Page 20 of 33
Required Hardcopy Documents
•
•
Required Financial Documents by Business Type Chart
Business Type
Balance Sheet
Financial
statements and tax
extract cover same
accounting period.
Financial
statements and
tax extract cover
same accounting
period.
MUST INCLUDE:
• Revenue
• Adjustment to
revenues
• Cost of goods sold
• Expenses by
category
• Net income/loss
Financial
statements and tax
extract cover same
accounting period.
Sole
Proprietor
MUST INCLUDE:
• Revenue
• Adjustment to
revenues
• Cost of goods sold
• Expenses by
category
• Net income/loss
MUST INCLUDE:
• Current assets
• Total assets
• Current
liabilities
• Total liabilities
• Stockholders'
equity
Financial
statements and
tax extract cover
same accounting
period.
MUST INCLUDE:
• Current assets
• Total assets
• Current
liabilities
• Total liabilities
• Owner's capital
Statement of
Cash Flows
Tax Return
Extract
Credit Report &
Numerical Score
Financial
statements and
tax extract
cover same
accounting
period.
Most current year
for which a tax
return has been
submitted (should
not include any
months prior to
2009 for fiscal
filers).
Credit report with
score that was
completed within
90 days prior to the
opening of the bid
window.** All
credit reports/
scores must be
prepared on or
after November 1,
2011, and before
March 31, 2012.
MUST INCLUDE:
• Operating
activities
• Financing
activities
• Investing
activities
• Beginning and
ending cash
balances
Financial
statements and
tax extract
cover same
accounting
period.
MUST INCLUDE:
• Operating
activities
• Financing
activities
• Investing
activities
• Beginning and
ending cash
balances
Page 21 of 33
MUST INCLUDE:*
• Form 1120:
pages 1 – 5 or
• Form 1120S:
pages 1 – 4 or
• Schedule C:
pages 1 – 2 or
• Form 1065:
pages 1 – 5
Most current year
for which a tax
return has been
submitted (should
not include any
months prior to
2009 for fiscal
filers).
MUST INCLUDE:
• Schedule C:
pages 1 – 2
MUST BE PREPARED
BY ONE OF THE
FOLLOWING:
• Dun & Bradstreet
• Experian
• Equifax
• TransUnion
• Standard & Poor's
Credit report with
score that was
completed within
90 days prior to the
opening of the bid
window.** All
credit reports/
scores must be
prepared on or
after November 1,
2011, and before
March 31, 2012.
MUST BE PREPARED
BY ONE OF THE
FOLLOWING:
• Dun & Bradstreet
• Experian
• Equifax
• TransUnion
• Standard & Poor's
Required Hardcopy Documents
LLC, PC, S or C
Corporation
Income Statement
Business Type
Partnership
Income Statement
Balance Sheet
Financial
statements and tax
extract cover same
accounting period.
Financial
statements and
tax extract cover
same accounting
period.
MUST INCLUDE:
• Revenue
• Adjustment to
revenues
• Cost of goods sold
• Expenses by
category
• Net income/loss
Non-Profit
Organization
MUST INCLUDE:
• Revenue
• Adjustment to
revenues
• Cost of goods sold
• Expenses by
category
• Net income/loss
Financial
statements and
tax extract cover
same accounting
period.
MUST INCLUDE:
• Current assets
• Total assets
• Current
liabilities
• Total liabilities
• Total net assets
or fund balances
Tax Return
Extract
Credit Report &
Numerical Score
Financial
statements and
tax extract
cover same
accounting
period.
Most current year
for which a tax
return has been
submitted (should
not include any
months prior to
2009 for fiscal
filers).
Credit report with
score that was
completed within
90 days prior to the
opening of the bid
window.** All credit
reports/scores must
be prepared on or
after November 1,
2011, and before
March 31, 2012.
MUST INCLUDE:
• Operating
activities
• Financing
activities
• Investing
activities
• Beginning and
ending cash
balances
Financial
statements and
tax extract
cover same
accounting
period.
MUST INCLUDE:
• Operating
activities
• Financing
activities
• Investing
activities
• Beginning and
ending cash
balances
Page 22 of 33
MUST INCLUDE:
• Form 1065:
pages 1 – 5
MUST BE PREPARED
BY ONE OF THE
FOLLOWING:
• Dun & Bradstreet
• Experian
• Equifax
• TransUnion
• Standard & Poor's
Most current year
for which a tax
return has been
submitted (should
not include any
months prior to
2009 for fiscal
filers).
MUST INCLUDE:
• Form 990:
pages 1 and 9 –11
Credit report with
score that was
completed within
90 days prior to the
opening of the bid
window.** All credit
reports/scores must
be prepared on or
after November 1,
2011, and before
March 31, 2012.
MUST BE PREPARED
BY ONE OF THE
FOLLOWING:
• Dun & Bradstreet
• Experian
• Equifax
• TransUnion
• Standard & Poor's
Required Hardcopy Documents
Financial
statements and tax
extract cover same
accounting period.
MUST INCLUDE:
• Current assets
• Total assets
• Current
liabilities
• Total liabilities
• Partners' capital
Statement of
Cash Flows
Business Type
Municipalityor StateOwned
Organization
Income Statement
Balance Sheet
Financial
statements and tax
extract cover same
accounting period.
Financial
statements and
tax extract cover
same accounting
period.
MUST INCLUDE:
• Revenue
• Adjustment to
revenues
• Cost of goods sold
• Expenses by
category
• Net income/loss
MUST INCLUDE:
• Revenue
• Adjustment to
revenues
• Cost of goods sold
• Expenses by
category
• Net income/loss
New Supplier
Balance sheets for
a 12-month
period with actual
and pro forma
data separately
prepared for the
months to which
they apply.
MUST INCLUDE:
• Current assets
• Total assets
• Current
liabilities
• Total liabilities
• Stockholders'
equity or owner's
capital
• Non-profit,
municipalityor state-owned
organizations
must include total
net assets
or fund balances
instead of
stockholders’
equity or owner's
capital
Tax Return
Extract
Credit Report &
Numerical Score
Financial
statements and
tax extract
cover same
accounting
period.
A tax extract is
submitted only if
the municipalityor state-owned
organization has a
tax filing
requirement.
Contact the
Competitive
Bidding
Implementation
Contractor if you
filed a tax return.
Credit report with
score that was
completed within
90 days prior to the
opening of the bid
window.** All credit
reports/scores must
be prepared on or
after November 1,
2011, and before
March 31, 2012.
If a tax return has
been filed, refer
to the relevant
business types
above for
requirements.
Credit report with
score that was
completed within
90 days prior to the
opening of the bid
window.** All credit
reports/scores must
be prepared on or
after November 1,
2011, and before
March 31, 2012.
MUST INCLUDE:
• Operating
activities
• Financing
activities
• Investing
activities
• Beginning and
ending cash
balances
Statements of
cash flows for a
12-month
period with
actual and pro
forma data
separately
prepared for
the months to
which they
apply.
MUST INCLUDE:
• Operating
activities
• Financing
activities
• Investing
activities
• Beginning and
ending cash
balances
Page 23 of 33
MUST INCLUDE:*
• Form 1120:
pages 1 – 5 or
• Form 1120S:
pages 1 – 4 or
• Form 1065:
pages 1 – 5 or
• Schedule C:
pages 1 – 2 or
• Form 990:
pages 1 and 9 –11
MUST BE PREPARED
BY ONE OF THE
FOLLOWING:
• Dun & Bradstreet
• Experian
• Equifax
• TransUnion
• Standard & Poor's
MUST BE PREPARED
BY ONE OF THE
FOLLOWING:
• Dun & Bradstreet
• Experian
• Equifax
• TransUnion
• Standard & Poor's
If a credit report is
not available for the
business, the
principal business
owner must supply
a personal credit
report with
numerical score
prepared within 90
days prior to the
opening of the bid
window by one of
the credit bureaus
listed above.
Required Hardcopy Documents
Income statements
for a 12-month
period with actual
and pro forma data
separately prepared
for the months to
which they apply.
MUST INCLUDE:
• Current assets
• Total assets
• Current
liabilities
• Total liabilities
• Total net assets
or fund balances
Statement of
Cash Flows
Business Type
Network
Income Statement
Balance Sheet
One year for each
network member.
Financial
statements and tax
extract cover same
accounting period.
One year for each
network member.
Financial
statements and
tax extract cover
same accounting
period.
MUST INCLUDE:
• Current assets
• Total assets
• Current
liabilities
• Total liabilities
• Stockholders'
equity or owners'
capital
Tax Return
Extract
Credit Report &
Numerical Score
One year for
each network
member.
Financial
statements and
tax extract
cover same
year.
For each network
member, refer to
the relevant
business types
above for tax
extract
requirements.
Credit report with
score, for each
network member,
that was completed
within 90 days prior
to the opening of
the bid window.**
All credit reports/
scores must be
prepared on or
after November 1,
2011, and before
March 31, 2012.
MUST INCLUDE:
• Operating
activities
• Financing
activities
• Investing
activities
• Beginning and
ending cash
balances
MUST INCLUDE:*
• Form 1120:
pages 1 – 5 or
• Form 1120S:
pages 1 – 4 or
• Form 1065:
pages 1 – 5 or
• Schedule C:
pages 1 – 2 or
• Form 990:
pages 1 and 9 –11
MUST BE PREPARED
BY ONE OF THE
FOLLOWING:
• Dun & Bradstreet
• Experian
• Equifax
• TransUnion
• Standard & Poor's
* The required form depends on your accounting period and business type. Contact your tax preparer if you have any
questions.
** Credit reports must reflect a numerical score unless you are using Standard & Poor’s. Standard & Poor's credit report
uses an alpha score instead of a numeric score; therefore, the report must contain the alpha grade such as AAA, AA, etc.
Gauges with an arrow indicating the relative value of credit or a credit report indicating the number of days beyond term are
not acceptable.
Note: Financial statements should be prepared in accordance with Generally Accepted Accounting Principles (GAAP).
Page 24 of 33
Required Hardcopy Documents
MUST INCLUDE:
• Revenue
• Adjustment to
revenues
• Cost of goods sold
• Expenses by
category
• Net income/loss
Statement of
Cash Flows
Other Required Documents (Non-Financial)
National Mail-Order Bidders
•
National Mail-Order 50 Percent Compliance Form
Bidders for the national mail-order competition for diabetic testing supplies must
complete, print, and mail the 50 Percent form that demonstrates the bid covers 50
percent of the brands of diabetic testing strips on the market. Bids that do not
include this form will be disqualified.
Network Bidders
•
Legal Agreement Between All Network Members
Networks must form a single legal entity for the purpose of submitting a bid as a
network. All agreements, including contracts, between the network’s members
must be in place and signed before the network entity may submit a bid.
A copy of the legal agreement must be submitted with the other required
documents.
Small Supplier Certification Statement
The primary network member must submit a separate network certification page for
each member that is signed by the individual network member. This page certifies
that the network member is unable to independently furnish all of the items in
the product category for which the network is submitting a bid to
beneficiaries throughout the entire geographic area of the CBA. Please note
that bidders in the national mail-order competition are excluded from participating
in a network.
Bidders That Choose to Subcontract in Round 2 or National Mail-Order
•
Letter of Intent to Enter into a Subcontracting Agreement
A signed letter of intent to enter into a subcontracting agreement must include the
following information:
• Identification of the parties,
• Language clearly indicating that the subcontractor has agreed to supply
items/functions/services,
• Anticipated length of agreement,
• Attestation that the subcontractor currently possesses all required state
licenses for every state in the CBA for which they will be servicing,
• Attestation that the subcontractor currently meets all quality standards and is
accredited by a CMS-approved accreditation organization, if applicable,
• Signature of both the bidder’s authorized official and the subcontractor
• Language obligating the subcontractor to abide by state and federal privacy
and security requirements, including the privacy provisions stated in the
regulation for this program.
See the Subcontracting section of this document for more information about
subcontracting.
Bidders That Have Been Sanctioned
•
Settlement Agreement or Corporate Integrity Agreements
The bidder must submit a copy of any settlement agreement or corporate integrity
agreement that has been reached between the supplier and any federal agency
within the last five years.
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Required Hardcopy Documents
•
Covered Document Review Process
CMS will review financial documents that have been received on or before the covered
document review date (CDRD). Other required (non-financial) documents are not subject to
the CDRD process. The CDRD is either the later of the date that is 30 days before the end of
the bid submission due date or 30 days after the start of the bid submission period. For
example, if the 60-day bid window opens on October 1 and closes on November 30, the
CDRD would be October 31. The CDRD for the Round 2 and national mail-order
competitions is February 29, 2012.
No hardcopy documents will be accepted after the bid window closes, with the exception of
documents requested by the CBIC as part of the covered document review process set forth
in MIPPA.
Bidders that submit financial documents on or before the CDRD will be notified in writing by
CMS within 90 days of the CDRD of any missing financial document(s). Bidders have ten (10)
business days from the date of the notice to submit the identified missing financial
document(s).
The review only determines if there are any missing financial documents. It does not
indicate if the documents received are acceptable, accurate, or meet applicable
requirements.
After the bid window closes, bidders may only submit the requested financial documents
identified as part of the CDRD process and cannot submit corrections to any other required
documents.
See the Covered Document Review Date fact sheet on the CBIC website for further
information.
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Required Hardcopy Documents
Bidders that do not submit their hardcopy financial documents on or before the CDRD will not
be notified of any missing financial documents.
Appendix A: Definitions
Authorized Official (AO): The authorized official must be an individual identified as the
authorized official on the CMS-855S enrollment application. This individual must be appointed by
the supplier and be the supplier’s general partner, chairman of the board, chief financial officer,
chief executive officer, president, direct owner of the supplier organization, or must hold a position
of similar status and authority within the supplier’s organization. The authorized official has the
legal authority granted by the supplier to submit a bid on behalf of the company and to enter into
a contract with Medicare to furnish competitively bid items to Medicare beneficiaries. For
registration purposes, there can only be one AO for an organization. The AO may approve or
reject the request for backup authorized officials (BAO) and end users to access and enter data in
DBidS.
Backup Authorized Official (BAO): One or more individuals listed on the CMS-855S form who
can serve as a backup to the authorized official (AO) in order to avoid disruption in the bidding
process should the AO leave the organization or become unavailable during the bid window. For
registration purposes, there can be one or more BAOs in an organization.
Bid: An offer to furnish an item for a particular price and time period that includes, as appropriate,
any services that are directly related to the furnishing of the item. The bid should consider all
costs associated with furnishing an item.
Bidder Number: System generated number that identifies each unique bidding entity.
Bid Price/Amount: The amount a bidder offers to furnish a competitively bid item to Medicare
beneficiaries in a specific CBA, as part of the Competitive Bidding Program. The bid amount must
be bona fide for each item (identified by the HCPCS code). It should be rational, feasible, and
supportable, include the cost of furnishing the item throughout the CBA (except for SNFs and NFs
that elect to participate as specialty suppliers) for the duration of the contract period, and include
overhead and profit.
Bid Window: The period of time during which the bidder can submit bids for consideration in a
competitive bidding round. No bids are accepted after the bid window closes.
Centers for Medicare & Medicaid Services (CMS) Approved Accreditation Organization: An
organization that has been approved by CMS to accredit suppliers of DMEPOS items. A listing of
approved accreditation organizations can be found by visiting:
http://www.cms.gov/MedicareProviderSupEnroll/Downloads/DeemedAccreditationOrganizationsC
MB.pdf
Common Ownership or Common Control: (i) an ownership interest is the possession of equity
in the capital, stock, or profits of another supplier; (ii) a controlling interest is when one or more of
the owners of a supplier is an officer, director, or partner in another supplier; and (iii) two or more
suppliers are commonly owned if one or more of them has an ownership interest totaling at least
5 percent in the other(s).
Competitive Bidding Area (CBA): An area established by the Secretary for the purposes of the
Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS)
Competitive Bidding Program. The area is defined by ZIP codes and may be larger than or
smaller than the related metropolitan statistical area (MSA).
The national mail-order CBA includes all parts of the United States, including the 50 states, the
District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, and American Samoa.
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Appendix A: Definitions
Balance Sheet: A financial statement that summarizes a company’s assets, liabilities, and
owner’s equity at a specific point in time.
Competitive Bidding Implementation Contractor (CBIC): The CMS contractor that is
responsible for conducting certain functions, including assisting CMS with performing bid
evaluations, supporting CMS’ education efforts, and monitoring the Medicare DMEPOS
Competitive Bidding Program.
Competitive Bidding Program: A program where CMS solicits bids from qualifying suppliers,
establishes a single payment amount, and awards contracts within a designated CBA.
Contract Supplier: An entity awarded a contract by CMS to furnish items under a Competitive
Bidding Program.
Entity: For competitive bidding purposes, the term “entity” refers to a unique bidder. For example,
for a supplier that is commonly owned and/or commonly controlled and has multiple locations, all
the locations furnishing competitively bid items within the designated CBA are considered one
entity.
Fee Schedule: Medicare Part B payment amounts, as authorized by section 1834 of the Social
Security Act, for DMEPOS items and services that are not included in the Competitive Bidding
Program.
Income Statement (Profit and Loss Statement or Statement of Operations): A financial
report on the results of a business’ performance as reflected in the profitability of a business over
a certain period. It itemizes the revenues and expenses of past performance that led to the
current profit or loss.
Item: A product included in the Competitive Bidding Program that is identified by a HCPCS code,
which may be specified for competitive bidding (for example, a product when it is furnished
through mail-order), or a combination of codes and/or modifiers, and includes the services directly
related to the furnishing of that product to the beneficiary. Items that may be included in a
Competitive Bidding Program are:
(1) Durable medical equipment (DME) other than class III devices under the Federal
Food, Drug and Cosmetic Act, as defined in 42 CFR §414.202 of this part and group 3
complex rehabilitative wheelchairs and further classified into the following categories:
(i) Inexpensive or routinely purchased items, as specified in 42 CFR §414.220(a).
(ii) Items requiring frequent and substantial servicing, as specified in 42 CFR
§414.222(a).
(iii) Oxygen and oxygen equipment, as specified in 42 CFR §414.226(c)(1).
(iv) Other DME (capped rental items), as specified in 42 CFR §414.229.
(2) Supplies necessary for the effective use of DME other than inhalation drugs.
(3) Enteral nutrients, equipment, and supplies.
(4) Off-the-shelf orthotics, which are orthotics described in Section 1861(s)(9) of the Act
that require minimal self-adjustment for appropriate use and do not require expertise in
trimming, bending, molding, assembling or customizing to fit a beneficiary.
Letter of Intent: A signed letter that represents an agreement to enter into a subcontracting
relationship, but is not the contract between the supplier and the subcontractor.
Mail-Order: Any item shipped or delivered to the beneficiary’s place of residence, regardless of
the method of delivery. A non mail-order item is one that a beneficiary or caregiver purchases at a
local pharmacy or supplier storefront rather than having the item delivered to the beneficiary’s
residence. Diabetic testing supplies are the only items included in the current national mail-order
competition.
Metropolitan Statistical Area (MSA): Area designated by the U.S. Office of Management and
Budget (OMB) for the purposes of census data and other urban population calculations. An MSA
can include major cities and the suburban areas surrounding them.
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Appendix A: Definitions
Healthcare Common Procedure Coding System (HCPCS): A standardized coding system
used to process certain claims, including those for DMEPOS items and services, submitted to
Medicare, Medicaid, and other health insurance programs by providers, physicians, and other
suppliers.
Multiple Locations: Two or more locations that are owned by one owner or by more than one
owner (commonly owned or commonly controlled). Each location must be identified by its unique
10-digit PTAN.
Network: A group of between two to 20 small suppliers that form a legal entity to provide
competitively bid items throughout an entire CBA. These suppliers must certify they cannot
independently furnish all competitively bid items in the product category to beneficiaries
throughout the entire geographic area of the CBA for which the network is submitting a bid. The
network collectively submits a bid as a single entity.
Network Member: Any member of a network, including the primary network member.
Parent-Subsidiary: Parent-subsidiaries are separate entities where one entity has control of the
other.
Primary Network Member: The network member that submits a bid on behalf of the network.
Product Category: A grouping of related items that are used to treat a similar medical condition.
Provider Transaction Access Number (PTAN): Previously referred to as the NSC supplier or
billing number.
Request for Bids (RFB): A part of the formal process by which CMS is requesting eligible
Medicare DMEPOS bidders to submit bids for the amount for which they would furnish items and
services included in the Competitive Bidding Program, as well as certain documents (hardcopy
and/or electronic) that demonstrate that the bidder meets applicable financial, quality, and
accreditation requirements.
Single Location: A supplier with one location that is owned by one or more owners and is
represented by a single PTAN.
Single Payment Amount: Allowed payment for an item furnished under a Competitive Bidding
Program.
Small Supplier: A supplier that generates gross revenue of $3.5 million or less in annual
receipts, including Medicare and non-Medicare revenue.
Specialty Supplier: A skilled nursing facility (SNF) or nursing facility (NF) that is awarded a
competitive bidding contract to furnish competitively bid items only to its own residents to whom it
would otherwise furnish Part B services.
Statement of Cash Flows: Includes cash flows resulting from operating, financing, and investing
activities.
Subcontractor: An entity, an individual, or a group of individuals that contracts with a contract
supplier to supply a service either to a contract supplier or directly to the beneficiary. Medicare
payment is made to the contract supplier for the cost of the service.
Page 29 of 33
Appendix A: Definitions
Provider Enrollment, Chain and Ownership System (PECOS): The Internet-based application
that can be used in lieu of the Medicare enrollment application (i.e., paper CMS-855) to enroll,
view or change enrollment information, track the enrollment application process, add or change a
reassignment of benefits, submit changes to existing enrollment information, reactivate an
existing enrollment record, or withdraw from the Medicare Program.
Appendix B: Hardcopy Document Package Checklist
Hardcopy Document Package Checklist
This checklist is not a required document, but a guide to help you prepare your package of hardcopy documents for
submission. Fact sheets, charts, and other resources pertaining to submitting a package can be found on the Competitive
Bidding Implementation Contractor (CBIC) website, www.dmecompetitivebid.com. Follow the Request for Bids (RFB)
Instructions carefully to ensure your documents meet all requirements. Remember, financial statements should
be prepared in accordance with generally accepted accounting principles (GAAP).
Income Statement – must include the following:
Revenues
Expenses by category such as salary, utilities, rent, etc.
Adjustments to revenues (if applicable)
Net income/loss
Cost of goods sold
Balance Sheet – must include the following:
Current assets
Total assets
Total liabilities
Current liabilities
Stockholders’ equity or owner’s capital
Statement of Cash Flows – must include the following:
Cash flow resulting from operating activities
Cash flow resulting from investing activities
Cash flow resulting from financing activities
Beginning and ending cash balances
Tax Return Extract (DO NOT send the entire tax return, only the required pages.)
Credit Report with score prepared within 90 days prior to the opening of the bid window by one of the five approved
credit reporting agencies (Dun & Bradstreet, Experian, Equifax, TransUnion, or Standard & Poor’s). All credit
reports/scores must be prepared on or after November 1, 2011, and before March 31, 2012.
Non-Financial Documentation**
Legal Agreement and Network Certification Page signed by EACH network member – (if applicable)
Signed Letter of Intent to Enter into a Subcontracting Agreement – (if applicable)
Settlement Agreement or Corporate Integrity Agreement – (if applicable)
Miscellaneous
Bidder number on EACH page of EVERY document.
All documents submitted in loose page format – no binders, folders, spiral binding, staples or paper clips.
ONE package per bidder number, regardless of number of bids for each product category/competitive
bidding area. For commonly owned or commonly controlled suppliers, compile all required documents from EACH
supplier included in the bid and submit ONE package. For networks, compile all required documents from EACH
network member and submit ONE package.
NATIONAL MAIL-ORDER BIDDERS ONLY
National Mail-Order 50 Percent Compliance form
All hardcopy document packages must be RECEIVED by the CBIC on or before the close of the bid window. Packages
should be sent to:
PALMETTO GBA
COMPETITIVE BIDDING IMPLEMENTATION CONTRACTOR
2743 PERIMETER PKWY, SUITE 200-400
AUGUSTA, GA 30909-6499
If you need to submit a revised document or additional documentation before the close of the bid window, you only need
to submit those documents and not the entire package.
*Refer to the Required Financial Documents by Business Type chart for specific requirements based on your business type.
**Refer to the Non-Financial Documents section of the RFB Instructions for specific requirements.
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Appendix B: Hardcopy Document Package Checklist
Financial Documentation*
Appendix C: Sample Hardcopy Financial Documents
Appendix C: Sample Hardcopy Financial Documents
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Appendix C: Sample Hardcopy Financial Documents
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Appendix C: Sample Hardcopy Financial Documents
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